IBM'S Business Analytics and Optimization Service Comes to Market

Recently, I was invited to attend an analyst briefing event at IBM's TJ Watson Research Center in Hawthorne, NY to hear about their new Business Analytics and Optimization service line.  The company is quite excited about this new service line, which they describe as one designed to use analytics to help companies “improve the speed and quality of business decisions.”  They cite some underlying drivers of demand – like the fact that many business leaders say they don’t have enough information to make business decisions, or that many business decisions are based on gut feel – as pointing to the fact that more customers will look to IBM for a quantitative, data-driven analysis of their business situation and options.

Overall, I was impressed.  I had a very nice lunch with Fred Balboni (the service line leader) in which, in addition to discussing his ambitious cycling regimen, he explained why the new service line is both important to the market, and consistent with IBMs existing capabilities.  The company claims that while the service line is new, they have been doing projects in this area for quite a while as part of their services work. 

I also think IBM is tapping into to some powerful trends around business decision making that relate closely to the “business technology” themes we write about here at Forrester.  As computing becomes ubiquitous, it makes it easier to monitor and measure efficiency and  effectiveness – and that data needs to be used…The problem for most organizations is that are already sitting on piles of interesting quantitative information, but don’t have the expertise or time to make sense of it all.  IBM is in a strong position to help customers with that -- its simply a good match to their capabilities and brand.  

Of course, I can be a skeptic too…Just because CEOs make decisions based on gut feel today, and say they want more information to make more decisions, it does not mean that they are willing to pay money to IBM to change the situation.  I’ve always found that the majority of CEOs, particularly at SMBs, like to trust their gut and intuition more than they trust consultants (I act as one here at Forrester, so maybe its just me). And quant-heavy approaches may be somewhat out of favor these days (what with the whole AIG fiasco)...But its reasonable that within IBM’s primary market (larger companies), business decisions based on gut feel are no longer a viable way to justify serious strategic moves.  For this reason, the dedicated service line makes a lot of sense. 

Please feel free to comment!
Chris Andrews